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Government statement on the RHI scheme designed to encourage the take-up of low-carbon heating systems:

This is a new market for the UK. The RHI tariff scheme, which we [DECC] will shortly be asking Parliament to approve, will stand alongside the Renewables Obligation and Feed in Tariff scheme to send a strong signal of support to the renewables sector.

By 2020 we [DECC] estimate that the renewable heat sector will have grown to include around:

13,000 installations in industry;

110,000 installations in the commercial and public sector, supplying 25% of the heat demand in these sectors;

This is seven times the number of anticipated installations in 2014.

Anything from a pub to a public library, a school to a power plant will be eligible under the RHI to install technologies like biomass boilers, heat pumps and solar thermal. Community projects will also be eligible, provided a single installation is providing heat to more than one house.

The tariffs will be paid for 20 years to eligible technologies that have installed since 15th July 2009 with payments being made for each kWh of renewable heat which is produced.

Once in the scheme the level of support an installation will receive is fixed and adjusted annually with inflation. However, as with feed in tariffs, we [DECC] expect the levels of support available for new entrants to the RHI scheme will decrease over time as the costs of the equipment and installation reduce through economies of scale.